The Investment Philosophy of Warren Buffett - In 23 Quotes

The Investment Philosophy of Warren Buffett - In 23 Quotes
By David Van Knapp

Warren Buffett is the most successful investor of our time, perhaps of any time. He is famous for his pithy quotes, which often appear in his annual letter to shareholders.

Taken together, his quotes pretty well sum up his investment philosophy and approach. Here are his best sound bites of all time on being a sensible investor.

1. Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.

2. Investing is laying out money now to get more money back in the future.

3. Never invest in a business you cannot understand.

4. I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.

5. I put heavy weight on certainty. It's not risky to buy securities at a fraction of what they're worth.

6. If a business does well, the stock eventually follows.

7. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

8. Time is the friend of the wonderful company, the enemy of the mediocre.

9. For some reason people take their cues from price action rather than from values. Price is what you pay. Value is what you get.

10. In the short run, the market is a voting machine. In the long run, it's a weighing machine.

11. The most common cause of low prices is pessimism. We want to do business in such an environment, not because we like pessimism, but because we like the prices it produces. It's optimism that is the enemy of the rational buyer. None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling.

12. Risk comes from not knowing what you're doing.

13. It is better to be approximately right than precisely wrong.

14. All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.

15. Wide diversification is only required when investors do not understand what they are doing.

16. You do things when the opportunities come along. I have had periods in my life when I have had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.

17. [On the dot-com bubble:] What we learn from history is that people don’t learn from history.

18. You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.

19. You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.

20. You should invest in a business that even a fool can run, because someday a fool will.

21. When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

22. The best business returns are usually achieved by companies that are doing something quite similar today to what they were doing five or ten years ago.

23. Diversification may preserve wealth, but concentration builds wealth.

If you would like to learn about a stock investment approach that that uses similar strategies as those reflected in this article, please consider purchasing Sensible Stock Investing: How to Pick, Value, and Manage Stocks. The book has a perfect 5-star reader rating on Amazon.com. Click on this link to learn more about the book and its systematic, user-friendly approach to investing, designed specifically for the individual investor: http://www.SensibleStocks.com

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The Difference Between Hedgers and Speculators

The Difference Between Hedgers and Speculators
By Erik Schouman

Throughout wall street futures have had the reputation of being a game that is only played by high-risk speculators. But the truth is they play an important roll in stabilizing prices. There are two distinct types of players in this market.

The hedgers are primarily interested in the commodities. They consist of producers, like farmers, mining companies, foresters, and oil drillers. or they can be users, like bankers, paper mills, jewelers, and oil producers. The main difference between these two types of hedgers is; the producers sell the futures contracts, and the users buy them. The primary concern of the hedger, is to protect themselves against price increases that will undercut their profits.

Then there are the speculators, they trade futures strictly to make money. If you trade in the futures market, but never use the commodity itself, then you are speculator. Most speculators will buy and sell futures contracts, depending on which way the market happens to be going at the time with any particular commodity. Sometimes they will sell their futures contracts for more money than they paid for them, and use the profit that they make to off-set the higher price they will have to pay in the cash market. Either way, there aren't any surprises in added commodity costs because the cash price and the futures price cancel each other out.

Speculators try to make money in the futures market by betting on price move. For instance a speculator might load up on futures pertaining to a particular cash crop in the hopes that if an act of "God" occurs and the crop is damaged that the prices of the crop will soar along with the futures contracts that are based on that particular crop.

If the speculators happen to be right, then the futures contracts for that commodity will be worth more than they paid for them. This in-able them to sell their contracts for a profit. However if they are wrong and the crop that they are betting on turns out to be a bumper crop that year, the bottom will fall out and the speculators will be squeezed dry.

Futures and options are very different from, stocks, bonds, and mutual funds because they fall into what is known as zero sum markets. This simply means that every time someone playing in this market makes a dollar, someone else loses a dollar in this market.

To learn the truth about options trading and discover some useful options trading tips then visit: http://www.LearningOptionsTrading.com

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Economic Survival in the 21st Century

Economic Survival in the 21st Century - the Three Key Questions to Ask
By Henry To

In this “special report”, I want to pose a few important “philosophical questions” to my readers. Firstly -- our Federal Reserve Chairman, Alan Greenspan, addressed the effects and implications of our aging population on things such as Social Security again in a speech that he made last Friday. Readers may remember that I also briefly mentioned this issue in my June 24th commentary. I urge you to keep this worldwide phenomenon of the aging population firmly on the back of your minds. If you are like most people, then you earn you living by producing a certain thing – such as a consumer good, or a service that the masses want. Let’s face it – how many people really “struck it rich” by being pure traders or investment managers? The stock market and other financial markets are definitely very important to us investors/traders but this “super secular trend” of the aging of the worldwide population will impact every aspect of our lives, whether it is losing our relative competitiveness on the world arena, increasing pension and healthcare costs, or even a potential fundamental change of our political system.

The second question that I want my readers to think about is the potential end to the era of cheap energy prices – an era which we have basically enjoyed for the last two decades without thinking of the long-term repercussions. The United States, with less than five percent of the world’s population, currently consume approximately 25% of the world’s energy each year. Supply is maturing while demand continues to surge – as exemplified by the surging in demand from China and India. In the meantime, spare energy-producing capacity and inventory levels have been at all-time lows – potential for a perfect storm?

Finally, I want to ask my readers the following question: What kind of investor are you? What investing style do you adopt and what investing style are you most comfortable with? Can you be a contrarian and buy when the crowd is selling or are you merely a follower who is only comfortable if you fit in? These are straightforward questions – but these are questions that you really need to ask yourselves in order to truly make money in investing over the long run. If my readers take the time out to thinking about these three questions or issues – and ultimately have a firm grasp of even just one of the issues – then you will be in a much better economic situation than most Americans five to ten years from now.

To begin, what are the potential implications of the “aging population” phenomenon? Readers my recall that in my June 24th commentary, I stated: “Assuming that the current level of benefits remain into the future and assuming the level of taxes is not raised, then public benefits to retirees would dramatically increase going forward. On the extreme end, Japan and Spain will see a more than 100% increase in their outlays to retirees. Clearly, this is not sustainable. Either things such as defense or education spending will need to be cut, or the above countries will need to raise their taxes. Neither of the two scenarios is optimal. Borrowing more of their funds is not a long-term solution. Cutting funding in defense and education will comprise a country’s future, and raising taxes will place a huge social and financial burden on the population of the developed world – where taxes are already at a historically high level. Think about this: If you were a bright, young, French industrialist and you were forced to pay 60% of your income as taxes to support the elderly, what would you do? Why, you would vote with your feet and relocate to another country that is more tax-friendly and business-friendly – and so will other great talent that may have been a great contribution to the French economy. The governments of the developed world recognize this – but there are no easy solutions.

“This picture gets grimmer when one takes note of a study that was done by the Bank Credit Analyst. In that study, the BCA predicts that by the year 2050, the percentage share of the developed countries of the global population will drop from over 30% in 1950 to less than 14% -- or about equal to the population of the Islamic nations of the world. Similarly, Yemen will be more populous than Germany in 2050; while Iraq will be 30% more populous than Italy (Iraq is less than 40% the size of Italy today). Russia’s population is projected to continue to decrease – at a rate such that the population of Iran will be even higher to that of Russia’s in 2050. India will be the most populous nation in the world, and Pakistan will only lag the U.S. by approximately 50 million people. If the developed countries of today do not choose to work harder or become more efficient, then they will ultimately lose their comparative advantage, as the younger population of the world is inherently more hard-working, energetic, innovative, and creative. In today’s globalized world, this will be a killer for the average worker in the developed countries – the more so once the language barrier is eliminated (the successful commercialization of universal language translators is projected to happen in ten to fifteen years). I am generally more optimistic, as the elimination of the language barrier will greatly enhance business opportunities and efficiencies, but a person such as the average American worker will loss his or her comparative advantage in the global workforce. The availability of a huge supply of labor should also drive down wages in the global marketplace – and most probably increase the maldistribution of wealth in today’s developed countries.”

Like I have mentioned before, there are no easy solutions. If the average American sees an increase of 10 years in his or her life expectancy, can he or she reasonably or logically retire at the current normal retirement age of 65 (which was determined during the Roosevelt administration during the 1930s) without placing an undue burden on the system? The answer is most probably “no.” Applying the same working-years-to-retirement-years ratio to his or her new life expectancy, then the average American should probably work around five to six years more – thus giving a revised normal retirement age of 70 or so. Moreover, all this analysis is based on the outdated population distribution in the form of a pyramid – where the younger and more able workers represent a majority of the population (and where the elderly represents only a small minority of the general population). The pyramid distribution has historically facilitated government support of the elderly – as the monetary and social burdens have been shouldered by a relatively large younger population. The current experience of Europe and Japan suggests a more uniform distribution in the population of those countries going forward – as the birthrate in those countries are now dismally below the replacement rate of the population. The situation in the United States is not currently as drastic (given our relatively lax immigration policy) but we are heading towards the same direction. Thus to maintain the current standard of living at retirement, my guess is that the general population will not only have to work longer, but work longer hours in the present (and save more) as well.

The situation is more alarming when one considers that the combined population of China and India makes up over 1/3 of the world’s population. The number of unemployed workers in China is greater than the entire labor force of the United States. The competition for relatively unskilled jobs will continue, and it promises to accelerate going forward. The average American who does not stay ahead of the curve or does not keep pace of the trend will find his or her job being outsourced – not to mention the average wage being driven down by global competition. I, for one, believe that this continuing trend of globalization will make the world a better place, as hundreds of thousands of people will finally be empowered as they climb out of absolute poverty (again, over half of the world’s population currently live on less than two dollars a day) – and as the prices of consumer goods are driven down still further. The average American will probably disagree, but the trend of globalization and “offshoring” will not stop. The last time the United States adopted economic and military isolationism we had a Great Depression and subsequently, World War II. I sincerely do not think that this was a coincidence.

The trend of the general aging population and globalization will have a profound impact on all Americans. Ultimately, I think all Americans will benefit – although it may not be clear to people who are losing their jobs today. For the initiated and nimble, you will not only survive but thrive in these “interesting new times.” Imagine a market for your product that is over ten times the size of the population in the United States. China and India has historically disappointed – as the citizens of those countries have historically been too poor to consume much U.S. goods and services. Globalization and offshoring will change all these. A world more equalized economically will also mean a much more secure and less conflictive world.

Now, I want to address a similar concern of all Americans – as the era of cheap energy (basically the cheap energy prices as experienced by Americans for the last twenty years) comes to a close. While I think oil prices will decline in the short-term (i.e. for the next few months), I am longer-term bullish on both oil and natural gas prices (I will only discuss oil in this commentary). Consider the following:

• The world supply of oil is flattening out. Readers may not know this, but the United States today still produce enough oil to satisfy approximately 40% of total domestic demand. The United States also had 22.7 billion barrels of proved oil reserves as of January 1, 2004, eleventh highest in the world. According to the Energy Information Administration (EIA), the United States produced around 7.9 million barrels per day during 2003. This is down sharply from the 10.6 million barrels averaged in 1985. The peak of domestic oil supply occurred sometime during the 1970s. Today, total domestic production is at 50-year lows – and still falling.
  
• While Saudi Arabia (the world’s top exporter and contains 25% of the world’s reported reserves) has claimed that there are and will be no supply problems for the next few decades, they have not been transparent with their reserves data. According to Simmons & Company International, five to seven key fields in Saudi Arabia produce 90% to 95% of its total oil output – all but two fields are extremely old – with the last major find reported in 1968. The last publicized reserves data was in 1975 – when Saudi Aramco was still managed by Exxon, Mobil, Chevron and Texaco. In that report, the world’s best experts determined that all the key fields at that time contained 108 billion barrels of oil in recoverable reserves. If this holds true, then the peak of supply in Saudi Arabia will come soon. Moreover, if the report is correct, then there is really no “plan B” (unlike during the 1970s when the center of power shifted from the Texas Railroad Commission to OPEC due to the peaking of supply in the United States) – crude oil prices will soar.
  
• The “last frontier” for the production of oil (namely the North Sea, Siberia, and Alaska) is now aging. Most companies are now struggling in order to even maintain their current production levels.
  
• World oil demand continues to grow. Oil demand in the early 1990s stayed relatively flat (at around 66 to 68 million barrels per day) but over the next ten years to today, world oil demand increased 14 million barrels per day. Today, total world oil demand is greater than 82 million barrels per day. The energy “experts” who in the early 1990s predicted a flattening of oil demand growth and who wrote off demand growth in developing countries were dead wrong.
  
• No new refineries have been built in the United States for the past two decades, even as refineries have been closing every year during that same time period. Refining capacity from 1981 to the mid 1990s also dropped drastically (this author estimates a drop of approximately 6 million barrels per day in refining capacity during that time period). Since 1994, however, an expansion in refining capacity at existing refineries has contributed to an increase in refining capacity from 15.0 million barrels per day to 16.7 million barrels per day (as of today). Despite this expansion, however, domestic refining capacity is still stretched to the limit, as utilization at U.S. refineries is now averaging nearly 90% -- leaving no cushion room if something unforeseen happens.

There are currently three factors at work which should contribute to a continued increase in the world oil price – the maturing of supply, growing demand, and the lack of a cushion in refining capacity and low inventories. The “culprit” has usually been labeled as China, but it is interesting to note that the United States has had virtually no domestic energy policy (in terms of conservation and encouraging the development of alternative fuels) for the last twenty-something years. China demand, however, has soared over the last few years. It is now the second biggest oil consumer, having just surpassed Japan for the title. Demand for oil in China has more than doubled over the last 10 years (to today’s 6 million barrels per day), and this amazing increase is projected to continue, especially given the fact that oil demand in China is still a lowly 2 barrels per person per year (compared to 25 barrels per person here in the United States). Furthermore, it is interesting to note that the number of cars in China only totaled 700,000 as late as 1993 and 1.8 million as late as 2001. Today, the number of cars in China totaled more than 7 million – and this number could potentially have been much higher if not for the Chinese government intervention in limiting the number of cars that could be sold and driven each year. Now the most scary part: Current oil demand in India is only 0.7 barrels per person per year – given this fact, oil demand in India could potentially explode over the next decade – barring a huge worldwide economic recession or depression.

I believe my readers should be made aware of the current energy supply/demand situation. Given the above, what is the best course of action for the average American? How about the best course of action if you were the head of a motor company like GM or an airline pilot employed by a legacy airline like Delta? How about the best course of action for a mutual fund manager or a commodity fund manager? Since there are no easy solutions, there should be no easy answers either. In the short-run (three to five years), Americans will have to pay up if we want to drive gas-guzzling SUVs, and legacy airlines like Delta will have to continue to cut costs by probably further slashing labor costs as their first priority. A further improvement in extraction technology should help, but the serious development of alternative fuels will have to start now. I also believe that the next serious decline will be induced by a combination of an “oil shock” and a rise in interest rates. Readers may recall the relative strength chart that I developed in my August 15th commentary showing the AMEX Oil Index vs. the S&P 500 and the huge potential inverse heads and shoulders pattern in that chart. For now, the relative strength line should bounce around the neckline (the line drawn on that chart) – possibly even for a few years – but once the relative strength line convincingly breaks above the neckline, crude oil prices could rise to $80 or even $100 a barrel. I sure hope that my readers would not be taken by surprise if gas prices at the pump soars to $4.00 a gallon five to six years from now.

Finally, I want to pose to my readers the following question: Have you taken the time out to learn more about your psychological makeup and how it has affected your investment or trading decisions? What type of person are you when it comes to the market? Are you a so-called buy-and-holder, a swing trader, or a day trader? An independent thinker, a contrarian, a momentum investor or merely a follower? I am asking you these questions because of my following considerations:

• This author believes that we are currently in a secular bear market in domestic common stocks. While I believe that this current rally still have more room to go, I believe that a cyclical bear market will emerge in due time – this upcoming cyclical bear market may even take us back or below the lows that we hit during October 2002. If this is true, then a buy-and-hold portfolio would definitely not work – unless you were in natural resources or precious metals mining stocks.
  
• When this cyclical bull market tops out, all your friends, relatives, and the popular media will be telling you to buy more or to hold your common stocks. The bears and all bearish thoughts will be ostracized and frowned upon. This has happened in every bull market in everything in all human history. If you are in cash now, would you be able to remain in cash when the top finally comes or will you be unable to resist and buy in because you are afraid of “the train leaving the station without you,” so to speak?
  
• Most people are inherently not good day traders or even swing traders. To be good in even the latter, you need a huge amount of dedication and discipline.

Investing or trading has always been dominated by emotions and always will be. My thinking in starting www.marketthoughts.com has always been that that if I can get my readers to buy in now, it will be a much easier decision for them to sell and hold cash once the DJIA reaches 11,000 or 12,000 or so – as opposed to being in cash and staying out for the rest of this secular bear market. 99% of Americans are just not disciplined or dedicated enough to stay in cash during a secular bear market – not to mention staying in cash during the entirety of a secular bear market and buying and holding common stocks during the entirety of a subsequent secular bull market. The average human psyche is just not capable of doing this. Because of this, I sincerely believe that success in the stock market (for most people) during the next five to ten years would involve catching the swings at the right or near-right times. For readers who just cannot resist, I am also going to continue to recommend some common stocks at opportune times, but in no way should my readers take my recommendations as gospel and in no way should my readers put all their eggs in one basket. If you are a person who can stay in cash for the next ten years and wait until the Dow Industrials has a P/E below 10 and a dividend yield of over 5%, then more power to you – you are either already rich who have no need to make money in the market anyway or you are a very disciplined and independent-thinking person. Most Americans just cannot do that – but I am here to help.

Henry To, CFA, is co-founder and partner of the economic advisory firm, MarketThoughts LLC, an advisor to the hedge fund Independence Partners, LP. Marketthoughts.com is a service provided by MarkertThoughts LLC, and provides a twice-a-week commentary designed to educate subscribers about the stock market and the economy beyond the headlines. This commentary usually involves focusing on the fundamentals and technicals of the current stock market, but may also include individual sector and stock analyses - as well as more general investing topics such as the Dow Theory, investing psychology, and financial history.

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Buying and Selling Gold

Buying and Selling Gold
By William Brister

Gold has always been used as a form of money since 560 BC. And even today, it is considered by many cultures as a valuable and long term investment as well as a safe haven in times of crisis. Gold and other precious metals are assets that are both tangible and liquid and hence considered safer than other investments. Most people believe that if the monetary or financial systems collapse, gold would still retain its value. Selling gold accumulated over the years could be the answer out of financial ruin. Thus gold as an investment is a prudent idea. Even central banks across the world are believed to retain large reserves of gold.

Today, gold trades in all the big financial markets around the world. It would not be surprising to note that a current market price for gold is being established in some market at any time of the day or night. Two of the most important world markets are in London and New York.

The London market is one of the oldest in the world as well as the largest for physical gold. The term ‘London gold fix’ which has been used since 1919 is used in contract arrangements across the globe. The New York market is particularly noted for the volume of "paper gold transactions" such as futures contracts that are traded on the exchange. The other important gold markets are in Zurich, Tokyo, Sydney and Hong Kong.

Today, like all investments, the price of gold is governed by demand and supply as well as hoarding and selling. The latter plays a more important role as far as the affectations in price are concerned because all the gold that is mined comes on to the market at the right price. Thus, given the huge quantity of hoarded gold compared to the annual production, the price of gold is affected by changes in sentiment rather than changes in production or demand on gold jewelry.

Why invest in gold?

There are some fundamental reasons why the price of gold will tend to see an incline in the next few years and gold as an investment will be considered a wise move.

1. Since 2001, Gold is believed to have doubled in value. In a simultaneous reaction the U.S. Dollar index has fallen by about 23% while the Dow Industrials have only risen by 16%. That is why most analysts believe gold will continue its rise in a bull market and gold as an investment will continue to flourish.



2. Another important reason for gold prices to increase is the continuous rise in world oil prices. The factors leading to this phenomenon are the Middle East crisis, OPEC’s commitment to higher oil prices and more importantly the potential decrease in oil supplies with a growing demand of oil from developing nations. Subsequently, as oil prices rise, so do the gold prices as it spurs inflation in the economy.



3. Last but not the least it is the $63 million fiscal gap that is contributing to the rise in gold prices. The fiscal gap is a measure of the difference between projected future government expenditure and tax receipts. This means that, with a $63 million fiscal gap, the government is in debt or technically bankrupt. To manage this debt, it can print money which will only lead to inflation; thus precious metals such as gold will remain one of the few safe investments that not only protect us against inflation but also unrestrained government expenditure.

Thus, buying gold as an investment at today’s prices would offer considerable gains and protection from financial problems in the future.

William Brister http://moneyproguide.com/ - Buying gold as an investment at today’s prices would offer considerable gains and protection from financial problems in the future.

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The Facts About Futures and Options Trading

The Facts About Futures and Options Trading
By Erik Schouman

For many investors, trading in futures and options is considered to be a high risk investment, while others perceive futures and options to be protection against dramatic price changes that take place on a daily basis in the stock market.

Futures and options can be complex because they are derivative, or hybrid investments. In stead of representing ownership, like stocks or the promise of a loan repayment, with bonds. Futures and options are once or twice removed from a real product. A futures contract with a crude oil company, is a bet as to which way the oil prices are going to be moving. what happens to the actual product itself is of little concern to this type of investor.

For some investors, trading in futures and options are a way of reducing their investment risk. For instance farmers that agree to sell their grain at a good price are protected if the price of grain should drop. investors that sell options on stock that they own can offset their losses if the market should collapse. However the majority of investors that dabble in futures and options, do so because the possibility of sustaining a huge loss is balanced by the opportunity of an enormous gain. Individual investors playing in this area of the market are usually small players, because the stakes are high and the returns are unpredictable.

Although futures and options contracts are deals that are made for the future, the future that they are talking about when they make the contract isn't very far away. Take for instance futures contracts that are made on grains and other food sources usually will expire with-in a year of the contract being made, but investors can find contracts on certain financial futures that will last at least five years.

Most options contracts will expire with-in five months or less, although a few options have been known to last as long as seven months. Although there is an exception to this rule that is known as LEAP options, these are long-term options that can last up to thirty months.

To learn the truth about options trading and discover some useful options trading tips then visit: http://www.LearningOptionsTrading.com

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How to Select a Forex Broker

How to Select a Forex Broker
By Andrew Daigle

Selecting a forex broker is not an easy process. You need to think about what kind of trader your are and select the best forex broker for your style of trading. If you're a day trader and like to execute many trades each day, you may want to find a forex broker that offers low spreads. We pay spreads for exvery trade we execute and the larger the spread, the more commission you will pay to your broker for your trades.

A good forex broker will explain various forex trading systems and strategies to their clients and will assist in their process of putting these strategies to workThe advice from forex brokers will basically. The advice you receive from your broker will basically include technical analysis approaches and research methods followed by experienced traders and brokers that boost the client trader's performance as a forex trader.

In the earlier days of forex trading, the banks and large financial institutions had sole access to the forex market, but now with the advent of the internet technology, things have changed. As more novice traders have taken up forex trading as a home based business, the forex brokers are also realizing the importance of this trend and moving away from the conventional banks. More and more forex brokers hrough internet based businesses and offer their clients a complete suite of services based online. Today's forex brokers recognize that their customers are no longer the rich individuals or large institutions and have tailored their forex trading strategies to conform with the needs of their new, home based, middle class client. They know that the stakes for this type of client are lower and that they wish to maximize their profit but have a different appetite for risk. Also, in terms of certification, it is useful to work with an NFA (National Futures Association) member broking house.

Forex brokers that offer sound advice and have well recognized and verified credentials are, of course, the ones that you should be looking for. Additionally, don't rely blindly on the advice of a forex broker. If it sounds too good to be true, it probably isn't. Learn to trust your own judgment and ask your forex broker lots of questions. A reliable broker won't be bothered by this.

Let your needs guide you and your trading level help you choose the right broker for you. It will typically depend on whether you are a novice or an experienced forex trader. There are many forex trading brokerage firms that are targeted towards the beginner in forex trading. These will generally offer detailed research material and plenty of advice for the newbie trader. Additionally, these types of firms will provide access to forex trading software that will simulate the real trading environment and help to make the forex trader accustomed to using the tools of the trade.

For experienced forex traders, these types of detailed instructions may not actually be required, since these individuals will know their way around the forex market. For them, there are different forex brokerage firms that will offer advice with a greater emphasis on the logic behind the forex trading strategy and will go into greater depth on this matter. To find the best fit, read about various forex brokers, ask friends, ask about the forex broker's package offering and take the trials offered by a few of the online forex trading firms.

Andrew Daigle is the owner, creator and author of many successful websites including a free forex training web site ForexBoost and CashCurve, a resource for making money online.

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The Difference Between Hedgers and Speculators

The Difference Between Hedgers and Speculators
By Erik Schouman

Throughout wall street futures have had the reputation of being a game that is only played by high-risk speculators. But the truth is they play an important roll in stabilizing prices. There are two distinct types of players in this market.

The hedgers are primarily interested in the commodities. They consist of producers, like farmers, mining companies, foresters, and oil drillers. or they can be users, like bankers, paper mills, jewelers, and oil producers. The main difference between these two types of hedgers is; the producers sell the futures contracts, and the users buy them. The primary concern of the hedger, is to protect themselves against price increases that will undercut their profits.

Then there are the speculators, they trade futures strictly to make money. If you trade in the futures market, but never use the commodity itself, then you are speculator. Most speculators will buy and sell futures contracts, depending on which way the market happens to be going at the time with any particular commodity. Sometimes they will sell their futures contracts for more money than they paid for them, and use the profit that they make to off-set the higher price they will have to pay in the cash market. Either way, there aren't any surprises in added commodity costs because the cash price and the futures price cancel each other out.

Speculators try to make money in the futures market by betting on price move. For instance a speculator might load up on futures pertaining to a particular cash crop in the hopes that if an act of "God" occurs and the crop is damaged that the prices of the crop will soar along with the futures contracts that are based on that particular crop.

If the speculators happen to be right, then the futures contracts for that commodity will be worth more than they paid for them. This in-able them to sell their contracts for a profit. However if they are wrong and the crop that they are betting on turns out to be a bumper crop that year, the bottom will fall out and the speculators will be squeezed dry.

Futures and options are very different from, stocks, bonds, and mutual funds because they fall into what is known as zero sum markets. This simply means that every time someone playing in this market makes a dollar, someone else loses a dollar in this market.

To learn the truth about options trading and discover some useful options trading tips then visit: http://www.LearningOptionsTrading.com

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Stock Trading as a Home Based Business

Stock Trading as a Home Based Business
By Mark Crisp

Today, you can enjoy the fruits of the stock market all from the comfort of your own home. Just imagine being your own boss, with no hours to commit to. No commuting back and forth to work. You will never have to worry about having job security again. You will be able to come and go as you see fit. You can become a successful stock trader with little to no effort on your part.

The internet has made it possible for people to build their financial portfolio and learn the ins and outs of the stick market, making them on top of their game. People can start with as little as $100 to invest and then they can build that money in their trading account to well over $100,000.00 in a year’s time. This is great for anyone looking to supplement their income or even replace it.

The internet offers unlimited learning for many different areas but the stock market is perhaps the most lucrative one. Let’s face it; there isn’t much opportunity out there to change $100 to $100,000.00 in a year’s time. Take your time and read up as much information that you can. Know the stocks that you are looking into investing in and read, read, read. Knowledge is power and power is everything. You can give yourself the power to be financially set.

Do not jump into the first deal that comes along, do some checking and make sure that the deals that interest you are the real deal. With so many scam artists out there, you want to be sure that what you see is what you get. With a little bit of homework you will be sure to set yourself up for a lifetime of financial stability.

Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at: http://www.stressfreetrading.com

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http://EzineArticles.com/?Stock-Trading-as-a-Home-Based-Business&id=554575

Some Tips on Getting Term Life Insurance Online

Some Tips on Getting Term Life Insurance Online
By Elizabeth Newberry

If you’re considering getting term life insurance online, you’re not alone. There are websites upon websites available to help you search for, compare, and get quotes for term life insurance policies, and those websites are here for a reason – to help the millions of people just like you who are interested in getting term life insurance online!

Before you dive too deeply into the process of finding your term life insurance policy online, take these tips into consideration.

Find a website with a large database. You want to search for term life insurance online using a website that has access to many life insurance companies and their term life insurance policies. This widens your options, making it easier for you to find the policy that’s right for you.

Decide how long you want life insurance coverage. Term life insurance policies can last for as few as five years and as many as 30 years. When you search for term life insurance online, you’ll be asked how long you want life insurance coverage.

Take a look at your budget. Figure out how much you can afford to pay in premiums. You may find a term life insurance policy online that seems affordable, only to find out later that you can’t quite swing it. Enter your search with a clear understanding of what you can afford to spend without going broke.

Spend time comparing various policies and quotes. You may find a really great term life insurance policy or two upon your first search, but look closely at other policies, too. You should also do some research on the companies offering the policies. You may even want to use more than one website during your search.

Always speak with a live insurance agent. Shopping online is convenient; however, term life insurance is an important purchase, so make sure you understand everything by speaking to a live insurance agent from the insurance company.

Some of Our Recommended Sources for Discount Life Insurance Quotes

Free Term Life Insurance Quote Online Here

Budget Life Insurance Quotes and Information

Recommended Whole Life Insurance Quotes

Article Source: http://EzineArticles.com/?expert=Elizabeth_Newberry
http://EzineArticles.com/?Some-Tips-on-Getting-Term-Life-Insurance-Online&id=552436

What is Level Term Life Insurance?

What is Level Term Life Insurance?
By Elizabeth Newberry

Level term life insurance, the most common form of term life insurance, is a life insurance policy that gets straight to the point. It’s similar to regular term life insurance in that it provides pure life insurance coverage when you need it with none of the frills of whole life insurance, such as forced savings components.

Level term life insurance has a guaranteed level premium, and you aren’t required to annually renew the policy. The insurance premium stays the same for a set period of time – the length of time for which the policy is in effect (usually 10, 15, 20, or 30 years). The longer the policy is in effect, the higher the annual premium will be.

For example, if you purchase a level term life insurance policy for 10 years, you’ll pay lower premiums than you’d pay if you purchase level term life insurance for 30 years. The reason for this is you’ll get much older during the course of a 30-year policy than you’ll get during the course of a 10-year policy, and life insurance companies view older individuals as more risky to insure. If you purchase a 10-year policy when you’re 30 years old, you’ll only be 40 years old when the policy expires; however, if you purchase a 30-year policy when you’re 30 years old, you’ll be 60 when the policy expires. It costs more to insurance a 60-year-old than it costs to insure a 40-year-old. Make sense?

Level term life insurance policies normally include renewal options. This means you can renew your policy at a maximum guaranteed rate if you choose to extend the term of insurance coverage. This option is usually only implemented if your health has greatly deteriorated during the original term of insurance coverage.

If level term life insurance sounds right for you, begin your search now and make your purchase as early as possible to ensure the lowest premiums possible.

Some of Our Recommended Sources for Discount Life Insurance Quotes

Level Term Life Insurance Quotes Online Here

Term Life Insurance Quotes and Information

Quick Whole Life Insurance Quotes Here

Article Source: http://EzineArticles.com/?expert=Elizabeth_Newberry
http://EzineArticles.com/?What-is-Level-Term-Life-Insurance?&id=552439

How to Compare Low Cost Car Insurance

How to Compare Low Cost Car Insurance
By Angela Farnsworth

Car insurance in America has become even more expensive. All most most of America drives so we want to find the best car insurance we can out there.

How to find the best rates.

Insurance rates can differ from hundreds of dollars from company to company. Before or
you can settle on a rate that’s best for you it’s vital to shop around for insurance quotes. As you have probably already heard plenty of times before the best way to do this is through the internet.

Through several popular websites online you can enter your car and driving information on one form and receive several quotes from several different companies instantly. Doing this way is faster and you will definitely get better results.

Once you have gotten several quotes from the different companies your probably ready to choose the insurance with the cheapest rate. Be careful you never want to fall into the trap. The cheaper doesn’t always mean the best. You have to evaluate each company by considering what they offer that can benefit you and that you can afford.

How to evaluate companies:

Check the ratings on all the companies on charts Standard& Poor.
Consider their payment options. Are you able to pay online, or by telephone?
Take into account their availability. Is it easy to get in contact with them? Is there an agent or anyone you can talk to anytime you need advice or questions?

After you have done all of this review your policy one more time to make sure it has everyday you need before you sign the dotted line. Once you have signed the line you have successfully found the best affordable car insurance rate in Colorado.

One thing you should keep in mind when hunting for the right car insurance is to by no means ever sacrifice quality and service for a cheap price. There are plenty of insurance companies out there that will offer you a low rate but when you really need their help they won’t be there for you. So in actuality your wasting money that could otherwise be saved for something worthy.

That’s when comparing low cost car insurance comes into play. You can use an Comparison website for car insurance quotes.

There are plenty of reliable ones too all over the internet. A comparison shopping website for car insurance quotes will compare the different quotes you’ve receive. It will evaluate their insurance products and offers and decide what is policy is best for you. Online comparison shopping websites are teamed up with some of the best insurance companies, so you will definitely receive all the help an service you need.

In order to get started, all you have to do is choose one or a couple of these websites and enter your information in the simple form provided. Instantly you will receive different quotes from several different companies. If you have found one that matches your needs you can select that coverage and even buy it online. This is one of the fastest and easiest ways to purchase car insurance on your car.

Online comparisons sites are all over the web. Not only are they easy to find but their reliable. You can trust putting your information on these websites because the information you provide is processed through an secured connection.

Comparison websites are so informative, you’ll get all the information you need in not time. Go ahead and visit one of these websites and you will definitely find the right insurance policy for you in Colorado.

Our recommended sites for low rate car insurance online.

We Recommend: Low Cost Car Insurance Quotes Fast

We Recommend: Home Insurance Quotes and More...

Article Source: http://EzineArticles.com/?expert=Angela_Farnsworth
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Auto Insurance is Important Although it is not Compulsory in all States and Countries

Auto Insurance is Important Although it is not Compulsory in all States and Countries
By Shane Van Niekerk

Auto insurance is important although it is not compulsory in all states and countries. Basic insurance is though, is enforced by law in some states. Motorists have to be insured for liability covering as this pays for the damage and injury to drivers and passengers involved in an accident which was caused by you.

It is advisable to get insurance coverage for damage sustained by your vehicle if you were involved in an accident. Vehicles are expensive and repairs can cost a lot of money so it is well worth the expense of the premiums to be able to claim for any damages done as a result of an accident.

There are a number of categories of insurance coverage which motorists can choose from. Decide which will suit you if you do not want to pay for all the categories.

Underinsured covering means that you will be paid for all your medical expenses that are not covered by the other driver’s insurance policy.

You will probably want to have your car covered for any act of nature that is not caused by human error as you never know when something unforeseen can happen like a storm causing floods, or cyclones, hail or fire. If you were to collide with an animal this policy would also cover you. This is known as comprehensive coverage.

There is an insurance coverage for collisions if you were at fault and your vehicle was damaged. There is always a likelihood of this happening as there is so much traffic on the roads and not everyone is always careful.

This author writes informative articles on various subjects.
http://www.autoinsuranceswebsites.com

Article Source: http://EzineArticles.com/?expert=Shane_Van_Niekerk
http://EzineArticles.com/?Auto-Insurance-is-Important-Although-it-is-not-Compulsory-in-all-States-and-Countries&id=553706